Banque Saudi Fransi Q4 Profit Jumps After Drop In Provisions

Banque Saudi Fransi, part-owned by Credit Agricole, posted a three-fold rise in fourth-quarter net profit on Monday, after the bank rebounded from heavy provisions in the year earlier period.

The results from Saudi Arabia’s fifth-largest bank by assets were among a trio of generally upbeat results posted by lenders so far in the earnings’ season. Banque Saudi Fransi, Saudi Hollandi Bank and Riyad Bank have all delivered forecast-beating net profit.

“The results have been okay on balance. I’d been expecting more trading losses as net interest margins come under pressure from the volatility in markets,” said Chiradeep Ghosh, senior analyst at Securities & Investment Company, a Bahrain-based investment bank.

Banque Saudi Fransi made a net profit of SAR851 million ($226.8 million) in the three months to Dec. 31, up from SAR274 million in the same period a year earlier.

The bank cited an increase in total operating income — which rose 10.9 per cent to SAR1.42 billion and a decrease in total operating expenses for the higher profit without elaborating.

Saudi companies issue brief earnings statements early in the reporting period before publishing more detailed results later. However, total operating expenses if often interpreted as relating to expenses.

Ghosh estimates the amount of money set aside for bad loans fell to between SAR73 and SAR75 million in the fourth quarter of this year, compared with around SAR553 million during the same period of 2013.

On Sunday, Saudi Hollandi Bank and Riyad Bank, the kingdom’s oldest lender and third-largest bank by assets respectively, posted rises of 33 per cent and 2.9 per cent in fourth-quarter net profit.

Both cited higher operating income without elaborating for their profit increases.